Short answer: The plan still owes the benefit to the employee, and the employer pays it without reimbursement. That is why the stop-loss policy should mirror the plan document, and any plan change or exception should be approved in writing by the stop-loss carrier first.
Stop-loss insures the employer, not the employees. A stop-loss denial does not cancel a benefit the health plan owes, and a TPA’s decision to pay a claim does not automatically bind the stop-loss insurer.
Common gaps: benefits the plan covers but the policy excludes or limits (transplants, experimental treatment, certain drugs), different definitions of eligibility or allowed charges, claims paid outside the plan’s terms as a favor to an employee, extended coverage for someone on leave that the policy does not allow, plan amendments the carrier never approved, and claims paid outside the contract’s paid window.
Before binding, match the plan’s medical and pharmacy benefits, eligibility rules, allowable-charge method (such as reference-based pricing), appeals and continuation rules to the stop-loss definitions, and get written acceptance of any material plan amendment during the year.